Banking sector in Nghe An seeks solutions to unblock credit flow
By October 31, credit growth in Nghe An reached more than 7%, higher than the same period in 2023. Bank credit growth showed signs of recovery, reflecting an improvement in the economy's credit demand.
Recovery Signal
Thanks to focusing on directing credit growth from the beginning of the year, effectively implementing solutions, directing credit to production, business, priority sectors, etc., the business results at Vietinbank Cua Lo branch achieved good results, mobilization growth, and outstanding loans both increased quite well. By October 31, 2024, the mobilized capital of Vietinbank Cua Lo branch was estimated at VND 4,620 billion, an increase of VND 903 billion compared to the beginning of the year, an increase of 24%; total outstanding loans reached VND 6,300 billion, an increase of VND 1,000 billion compared to the beginning of the year, an increase of 19%.
Mr. Vo Huy Ha - Director of Vietinbank Cua Lo branch said: This year, after being affected by the Covid-19 epidemic, the production and business situation of enterprises has improved. We have implemented credit programs and credit packages with preferential and suitable interest rates to increase outstanding loans such as: Accompanying corporate customers program, Preferential loan program - Brightening the future, Credit packages by industry and location, Medium and long-term loan packages, etc.
"The goal set for VietinBank Cua Lo branch in 2024 is to continue to grow reasonably and develop sustainably, focusing on effective growth. Implement well the 10 key topics of VietinBank in 2024. Complete and exceed the targets assigned by the Vietnam Joint Stock Commercial Bank for Industry and Trade, continue to promote growth in outstanding loans, capital sources, increase non-interest income,... to lay the foundation for growth in 2025", Mr. Ha shared.
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At BIDV Nghe An branch, capital mobilization and credit both grew by 5%, in which, the individual customer segment grew better than the corporate segment. According to the assessment, this year's loan interest rate can be said to be at an unprecedented low, so it encourages individual customers to borrow. However, large enterprises and business investment are still facing difficulties, so the demand for loans has not been recorded much.
Ms. Le Thi Mong Ly - Deputy Director of BIDV Bank Nghe An branch said: "The branch's target is to continue to grow according to plan, with credit growth expected to reach 6-7% by the end of this year. To achieve the set target, we have many solutions, including many competitive credit packages for each customer group".
Regarding the current loan interest rate, Ms. Ha Thanh - owner of a construction business in Vinh city said: "The current loan interest rate is only half of last year's. Currently, our business is borrowing from SHB Bank at 6.5%/year for a 6-month term, Vietbank at 7%/year for a 3-month term, Vietinbank at 5.5%/year (loan conditions over 3 billion VND). With this interest rate level, it is a favorable condition for businesses to borrow capital for production and business, especially at the end of the year when capital demand increases."

It is known that the current lending interest rates for all terms and in all sectors are lower than last year and previous years. In particular, lending interest rates for priority sectors as prescribed by the Government are only below 4%/year. Interest rates have dropped to the lowest level in many years. The State Bank's directive is that banks continue to actively save costs to support the economy.
Credit growth is quite good.
In the first 10 months of the year, Nghe An's banking sector continued to lead the North Central region in terms of capital mobilization results; effectively implementing monetary, credit and banking activities in the area. In the third quarter of 2024, bank credit growth showed signs of recovery, reflecting an improvement in the economy's credit demand.
According to the report of the State Bank of Vietnam, Nghe An branch, by October 31, 2024, the capital mobilized in the area (excluding the Development Bank - VDB) is estimated at VND 256,740 billion, an increase of VND 24,396 billion compared to the beginning of the year, equal to 10.5%; the same period in 2023 was 10.8%.

By October 31, 2024, the total outstanding debt of credit institutions in the province is estimated at VND 317,011 billion, an increase of VND 21,232 billion compared to the beginning of the year, equal to 7.18% (the same period in 2023 was 5.7%). According to the assessment, Nghe An's capital mobilization growth is higher than the national average, but credit growth is lower.
By term: short-term debt reached VND 187,854 billion (accounting for 61.6% of total debt), medium and long-term debt reached VND 117,332 billion (accounting for 38.4% of total debt).
Outstanding loans for policy programs through the Social Policy Bank are VND 13,407 billion, accounting for 4.3% of outstanding loans in the whole area.

Outstanding loans of some credit programs as of October 31, 2024: Loans for the rural agricultural sector and rural areas in the whole area are estimated at VND 142,027 billion, accounting for 45% of outstanding loans in the whole area; Loans for high-tech agricultural development and clean agriculture under Resolution No. 30/NQ-CP are estimated at VND 20,501 billion, accounting for 6.5% of total outstanding loans in the whole area; Export loans are estimated at VND 2,650 billion, down 7.3% compared to the beginning of the year; Housing support loans under Resolution 02/NQ-CP dated January 7, 2013 of the Government are estimated at VND 71 billion, down 34.8% compared to the beginning of the year; Shipbuilding loans under Decree 67/2014/ND-CP are estimated at VND 79 billion, down 37.4% compared to the beginning of the year.
At the end of the year, many banks have taken steps to unclog credit flows, add new credit packages to lend new loans and reduce interest rates. For example, Vietcombank has reduced lending rates by 0.5-2% per year from now until the end of 2024 for all customers severely damaged by storm No. 3; the total outstanding loan support is about 160,000 billion VND. Agribank has reduced lending rates by 0.5-2% per year and exempted 100% of overdue interest and late payment interest for existing customers. For newly arising loans, Agribank has reduced lending rates by 0.5% per year for each subject and sector. BIDV has reduced interest rates by up to 2% per year depending on the level of damage and loan term of the customers. Similarly, VietinBank has set aside a support package of up to 100,000 billion VND to provide preferential loans with interest rates reduced by up to 2%/year...
According to the leader of the State Bank of Vietnam, Nghe An branch, credit is forecast to increase better in the last months of the year. The banking sector will continue to implement solutions to support difficulties for businesses and people affected by natural disasters and epidemics. Credit packages will be deployed to meet the capital needs for production and business in a timely manner, serving the living and legitimate consumption needs of people and businesses, and efforts will be made to increase credit growth while controlling credit quality.
According to data from the State Bank, as of September 30, bank credit nationwide increased by 9%. This credit growth shows a significant improvement in credit demand and the economy's capital absorption capacity, as by June 30, credit growth had only reached 6% compared to the end of 2023. By the end of May 2024, credit growth had only reached 2.4%.